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Handle customer retention or retainage

Some customers for certain types of projects require you to hold back 10 percent of your total invoice or 10 percent of each invoice (invoicing only for 90 percent of the contract price) until you've completed the project satisfactorily. After the job is complete and it's agreed that you can collect the remaining 10 percent, you then create an invoice to the customer for the balance.

The procedure described here for handling retainage will not only help you track who owes you for retention, but also track how much they owe. In addition, it helps to track the retention on your books as an asset until the customer pays the balance.

To do this task

  1. Set up an account for Retentions Receivable.

  2. Create an item for Retention.

  3. Include the retention on an invoice.

  4. Invoice the customer for the final retainage.

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